Financial Data and Key Metrics Changes - The company reported second quarter revenue of $27.4 million, exceeding guidance of $23.5 million to $26.5 million, and representing a 17% sequential increase from the first quarter [12][21] - Adjusted EBITDA loss for Q2 was $9.5 million, outperforming guidance of a loss between $10 million and $13 million, with an improvement of $4.8 million sequentially [12][22] - Scheduled service revenue increased by 20% in Q2 compared to Q1, while on-demand revenue rose by 5% [12][21] Business Line Data and Key Metrics Changes - Airline operations achieved profitability in Q2, with significant improvements in key operating metrics such as on-time departure and arrival, and controllable completion factor improved from 82% in Q1 to 95% in Q2 [5][12] - The on-demand business saw positive margins in June, attributed to a focus on product profitability and the introduction of a new jet card [7][12] Market Data and Key Metrics Changes - The company signed an interline agreement with Japan Airlines, enhancing passenger flow into its Hawaiian route network [6] - The essential air service (EAS) accounted for approximately 46% of scheduled service revenue, indicating its significance in the revenue mix [38] Company Strategy and Development Direction - The company is focused on transforming into a technology-led organization, emphasizing the development of the Surf OS software platform powered by Palantir [8][14] - Plans for 2026 include expanding the scheduled service network with new Tier one routes and aircraft from Textron Aviation [14][15] - The company is pursuing partnerships for electrification efforts, including a bilateral agreement with Elektra for hybrid electric aircraft [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory, highlighting improvements in capital structure, operational performance, and a focus on profitability [25] - The outlook for Q3 expects revenue to remain strong, projected between $27 million and $28.5 million, with adjusted EBITDA loss anticipated to be between $8.5 million and $10 million [23][24] Other Important Information - The company raised approximately $45 million in additional capital during Q2, which has accelerated operational improvements [13][19] - The agreement with Palantir positions the company as an exclusive partner for software configuration and sales to Part 135 operators and brokers [10][48] Q&A Session Summary Question: Can you talk about the go-to-market strategy for Surf OS? - The company is currently in the beta phase focusing on product development and identifying real use cases before moving to monetization strategies [28][29] Question: Any update on the certification process for electrification? - The company is on track for a late 2027 timeframe for its electrification initiative and is working with strategic partners [31][33] Question: How much more room for improvement is there in airline operations? - The company is in the middle innings of operational optimization, with ongoing improvements expected from the rollout of new applications [34][35] Question: What percentage of revenues were connected to essential air service? - Approximately 46% of scheduled service revenue is connected to essential air service [38] Question: What are the plans for the commercial launch of Surf OS? - The rollout is expected to begin in the first half of 2026, with a focus on proper implementation for initial partners [40][41] Question: Can you elaborate on the Palantir agreement? - The agreement expands the relationship with Palantir, allowing the company to be the exclusive partner for software sales to specific operators and to collaborate on larger projects [47][48] Question: What is the current controllable completion factor? - The controllable completion factor is currently around 95-96%, with efforts in place to maintain and optimize this performance [50][51]

Financial Data and Key Metrics Changes - First quarter revenue was $23,500,000, at the high end of the expected range of $21,000,000 to $24,000,000, keeping the company on track to meet the full year expectation of over $100,000,000 in revenue [8][26] - Adjusted EBITDA loss in Q1 was $14,400,000, within the expected range provided in the last earnings release [8][27] - Scheduled service revenue decreased by 23% year over year, primarily due to the elimination of unprofitable routes and a brief interruption of service in January [27] - On-demand service revenue decreased by 25% year over year, driven by lower sales and flight completions [27] Business Line Data and Key Metrics Changes - The Essential Air Service (EAS) Program represents approximately 40% of revenue, with long-term subsidized contracts providing connectivity to underserved domestic markets [21] - The company is focusing on profitability in the on-demand business and has exited several unprofitable charter products [13][27] - The company returned five older aircraft to lessors during Q1, simplifying the fleet to focus on the operationally efficient Cessna Grand Caravan [10] Market Data and Key Metrics Changes - The company operates almost exclusively in the U.S., primarily flying aircraft manufactured domestically, which mitigates the impact of tariffs [4][20] - The current economic environment has benefited the company, particularly with lower fuel costs [22] Company Strategy and Development Direction - The company aims to become a premier regional air mobility platform, focusing on three growth vectors: expansion of air mobility operations, commercial rollout of the regional air mobility software platform, and sale of electrified powertrains for the Cessna Caravan [29] - The company is in late-stage discussions with key partners to advance its electrification initiative [18][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging economic, regulatory, and funding environment but emphasizes proactive management of operations and cost structure [29] - The company expects to achieve positive adjusted EBITDA in airline operations by 2025 [19][28] Other Important Information - The company raised an incremental $5,000,000 in funding subsequent to the end of Q1 [9] - The interline agreement with Japan Airlines allows for expanded access to over 435 million customers [12] Q&A Session Summary Question: Impact of changes to the essential air service budget - Management believes that being a low-cost operator provides a competitive advantage, especially if higher-cost operators face subsidy reductions [33][36] Question: Core versus non-core scheduled and charter flights - Hawaii is identified as a core area, with a focus on profitability and operational efficiency in route selection [37][38] Question: Adding new profitable routes - The company is currently focused on exiting unprofitable routes and plans to enter new tier one routes next year [41] Question: Progress on Surf OS product - The company is integrating feedback from beta users and plans a full commercial rollout of Surf OS in 2026 [44][46] Question: Service interruption details - The service interruption in January was unplanned and related to maintenance issues, which have since been resolved [48] Question: Future partnerships and geographic targets - The company is open to expanding partnerships beyond the U.S., following the successful agreement with Japan Airlines [50]

Financial Data and Key Metrics Changes - Revenues for Q4 2024 reached $28,050,000, exceeding the upper end of guidance [5][22] - Adjusted EBITDA loss improved by $11,500,000 or 63% to $6,900,000 for Q4 2024 [6][22] - Full year revenue rose by $6,500,000 or 6% year over year to $119,400,000 [6][23] - Full year adjusted EBITDA loss improved by $6,800,000 or 13% to $44,100,000 [6][23] Business Line Data and Key Metrics Changes - Scheduled service revenue decreased by 6% due to the elimination of unprofitable routes [22] - On-demand service revenue increased by 58% driven by higher sales and flight completions [22] - Full year on-demand service revenue increased by 28% primarily due to improved charter sales [23] Market Data and Key Metrics Changes - The company has exited several unprofitable routes, focusing on profitable operations [9][24] - The Essential Air Service (EAS) business is expected to benefit from the FAA Reauthorization Act, enhancing competitive positioning [9] Company Strategy and Development Direction - The transformation plan consists of four phases: transformation, optimization, expansion, and acceleration, with the transformation phase completed in 2024 [7][8] - The company aims for profitable airline operations defined as positive adjusted EBITDA for the full year of 2025 [8][20] - The relocation of the operations center to Dallas, Texas is intended to attract talent and reduce costs [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitability in airline operations for 2025, driven by process improvements and exiting unprofitable routes [20][25] - The company anticipates achieving at least $100,000,000 in revenue and profitability in airline operations for the full year 2025 [26] - Management highlighted strong momentum entering 2025 with a focus on executing the transformation plan and electrification initiatives [33] Other Important Information - A $50,000,000 term loan was secured in November 2024 to support the transformation plan [5][25] - The company has reduced liabilities by over $42,000,000, exceeding the targeted reduction [25] Q&A Session Summary Question: Does a full year continuing resolution being passed by Congress impact when you can receive new contracts or renewals on the essential air service flights? - Management indicated that the DOT has several awards and bids pending, which could positively impact revenue through higher subsidy rates [34][36] Question: Do you plan to shift more of the fleet's airframes over to flying on-demand flights from scheduled air service? - Management clarified that the current fleet is primarily used for scheduled service, with operators servicing most on-demand business [37] Question: Could you provide additional color on the recently announced SurfOS customers and monetization? - Management stated that the offerings are currently in pre-revenue testing with beta customers [41] Question: Should we assume operating costs will be roughly flat in 2025 compared to 2024? - Management confirmed a focus on reducing operating costs to achieve profitability in airline operations [44] Question: Are you comfortable with the balance sheet to execute this plan and initiate growth strategies in 2025 and 2026? - Management expressed intent to be strategic with capital raises to create shareholder value [45] Question: Any early feedback on the SurfOS beta launch? - Management reported positive early feedback from beta customers regarding the unique offerings of SurfOS [50][51] Question: Is there any runway or cadence for addressing the maintenance backlog? - Management indicated that a substantial amount of the maintenance backlog is expected to be resolved in the first quarter [54]